Philly Fed Index Indicates Rebound In Regional Manufacturing Activity

Manufacturing activity in the Philadelphia-area rebounded in March, according to the firms responding to the Federal Reserve Bank of Philadelphia's Business Outlook Survey.

The Philly Fed released a report on Thursday showing that its diffusion index of current activity jumped to a positive 9.0 in March from a negative 6.3 in February. A positive reading indicates an increase in regional manufacturing activity.

Economists had been expecting the Philly Fed index to show a much more modest rebound to a positive reading of 3.2.

Both the new orders and shipments indexes also returned to positive territory, suggesting a return to growth following the weather-related weakness in February.

The new orders index climbed to a positive 5.7 in March from a negative 5.2 in February, while the shipments index surged up to a positive 5.7 from a negative 9.9.

On the other hand, the report showed that the number of employees index fell to 1.7 in March from 4.8 in February, indicating a slower pace of job growth.

The prices paid index also dipped to 13.9 in March from 14.2 in February, while the prices received index slid to 4.3 from 7.6 in the previous month.

Looking ahead, the Philly Fed said the survey's indicators of future activity reflected optimism about continued growth over the next six months.

The future general activity index fell to 35.4 in March from 40.2 in February, but the Philly Fed said it remained at a relatively high reading.

On Monday, the New York Federal Reserve released a separate report showing that business conditions for New York manufacturers continued to improve in the month of March, although the index of activity in the sector rose by less than expected.

The New York Fed said its general business conditions index edged up to 5.6 in March from 4.5 in February. Economists had expected the index to climb to a reading of 6.5.